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Pre-Budget report announced
On Wednesday this week the Chancellor, Alistair Darling, announced the pre-Budget report (PBR), setting out the government’s spending and taxation plans for the last time before a general election is called.
In the run-up to this year’s PBR there were reports that certain banks would be issuing bonuses to bankers – even those banks that have been bailed out by the taxpayer. It was therefore no surprise that in the PBR the Chancellor announced a one-off 50% tax on bonuses over £25,000 to be paid by the banks in an effort to calm the general public, who feel these bonuses are not deserved.
There were also other measures in the PBR that will affect consumers on a daily basis. From April 2011, all employers, employee and self-employed rates of National Insurance will rise by a further 0.5%, although if you earn £20,000 or less you won’t face the increase.
VAT will also be restored to 17.5% from 15%, so consumer goods will become that bit more expensive.
The Chancellor also offered support to young people struggling to find work by guaranteeing work or training if they have been unemployed for six months.
Extra help was also offered to low-income families, as free school meals have been extended to an additional 500,000 families and Child Benefit will increase by 1.5% in 2010.
Here is a review of the other top money stories of the past week commencing 7 December 2009.
Monday 7th December
OFT to clear up confusion over Consumer Credit Act – The Office of Fair Trading (OFT) has provided draft guidance on sections of the Consumer Credit Act in light of court cases currently being heard in Manchester about the enforceability of debts. The OFT was concerned that many creditors were misleading debtors by claiming that their debts were enforceable when in fact they were not. However the guidelines produced by the OFT also disagree with certain arguments being put forward by claims management companies such as the claim that debts are unenforceable if a copy of the original loan agreement cannot be produced. If you are worried about debt, call the Consumer Credit Counselling Service on 0800 138 1111. They are open from 8am-8pm.
In the run-up to this year’s PBR there were reports that certain banks would be issuing bonuses to bankers – even those banks that have been bailed out by the taxpayer. It was therefore no surprise that in the PBR the Chancellor announced a one-off 50% tax on bonuses over £25,000 to be paid by the banks in an effort to calm the general public, who feel these bonuses are not deserved.
There were also other measures in the PBR that will affect consumers on a daily basis. From April 2011, all employers, employee and self-employed rates of National Insurance will rise by a further 0.5%, although if you earn £20,000 or less you won’t face the increase.
VAT will also be restored to 17.5% from 15%, so consumer goods will become that bit more expensive.
The Chancellor also offered support to young people struggling to find work by guaranteeing work or training if they have been unemployed for six months.
Extra help was also offered to low-income families, as free school meals have been extended to an additional 500,000 families and Child Benefit will increase by 1.5% in 2010.
Here is a review of the other top money stories of the past week commencing 7 December 2009.
Monday 7th December
OFT to clear up confusion over Consumer Credit Act – The Office of Fair Trading (OFT) has provided draft guidance on sections of the Consumer Credit Act in light of court cases currently being heard in Manchester about the enforceability of debts. The OFT was concerned that many creditors were misleading debtors by claiming that their debts were enforceable when in fact they were not. However the guidelines produced by the OFT also disagree with certain arguments being put forward by claims management companies such as the claim that debts are unenforceable if a copy of the original loan agreement cannot be produced. If you are worried about debt, call the Consumer Credit Counselling Service on 0800 138 1111. They are open from 8am-8pm.
Tuesday 8th December
Energy companies warned to cut bills – The UK energy regulator, Ofgem, has warned Britain's big six energy supply companies to cut their gas and electricity prices in the New Year to avoid customers losing out. Overall, energy companies have lowered their prices by 5.6% this year whilst wholesale gas and electricity costs have dropped almost 22%. Suppliers now make about £85 a year per household due to the slump - up from £15 in February. Ofgem said that at the moment firms were still recovering from three or four years of losses, but it added that if wholesale gas prices continue to fall as predicted, then companies will need to reflect that in their bills.
Energy companies warned to cut bills – The UK energy regulator, Ofgem, has warned Britain's big six energy supply companies to cut their gas and electricity prices in the New Year to avoid customers losing out. Overall, energy companies have lowered their prices by 5.6% this year whilst wholesale gas and electricity costs have dropped almost 22%. Suppliers now make about £85 a year per household due to the slump - up from £15 in February. Ofgem said that at the moment firms were still recovering from three or four years of losses, but it added that if wholesale gas prices continue to fall as predicted, then companies will need to reflect that in their bills.
Wednesday 9th December
Consumer confidence remains stable – Confidence remained stable for a second consecutive month in November, according to the Nationwide Consumer Confidence Index released today. Consumer confidence measures how confident consumers are feeling about the state of the economy now and in the future. Confidence in the future remains strong with 84% of consumers now believing that the economic situation will be the same or better in six months' time, while just 14% believe it will be worse. At the beginning of 2009 consumer confidence dropped to record lows, but we have since seen the index return to pre-recession levels.
Consumer confidence remains stable – Confidence remained stable for a second consecutive month in November, according to the Nationwide Consumer Confidence Index released today. Consumer confidence measures how confident consumers are feeling about the state of the economy now and in the future. Confidence in the future remains strong with 84% of consumers now believing that the economic situation will be the same or better in six months' time, while just 14% believe it will be worse. At the beginning of 2009 consumer confidence dropped to record lows, but we have since seen the index return to pre-recession levels.
Friday 11th December
ONS shows the extent of wealth and debt in the UK – A report by the Office for National Statistics (ONS) released this week has revealed the true wealth of Britain - which they put at £9trillion. The survey collected evidence from 31,000 households and paints a very detailed picture of the extent of wealth and borrowing across the UK. Taking into account the value of housing, money held in private pensions and other possessions, the average household wealth is £204,500. However there are big differences in wealth depending on where in the country you live. The wealthiest area, with a median household wealth of £287,900, was the South-East of England; this is a marked contrast to households in Scotland where the median household wealth is £150,600. Alongside showing the wealth of the nation, the survey also shows Britain's borrowing habits, which are worrying. 35% of respondents in the survey said that they had never saved and 48% of households had some sort of outstanding unsecured borrowing, with the average debt of £2,700. The ONS survey took place between June 2006 and July 2008, so shows the levels of wealth and debt before the recession. It will be interesting to see the results of a survey between 2008 and 2010 to see how the nation's wealth and attitude to borrowing has potentially changed.
ONS shows the extent of wealth and debt in the UK – A report by the Office for National Statistics (ONS) released this week has revealed the true wealth of Britain - which they put at £9trillion. The survey collected evidence from 31,000 households and paints a very detailed picture of the extent of wealth and borrowing across the UK. Taking into account the value of housing, money held in private pensions and other possessions, the average household wealth is £204,500. However there are big differences in wealth depending on where in the country you live. The wealthiest area, with a median household wealth of £287,900, was the South-East of England; this is a marked contrast to households in Scotland where the median household wealth is £150,600. Alongside showing the wealth of the nation, the survey also shows Britain's borrowing habits, which are worrying. 35% of respondents in the survey said that they had never saved and 48% of households had some sort of outstanding unsecured borrowing, with the average debt of £2,700. The ONS survey took place between June 2006 and July 2008, so shows the levels of wealth and debt before the recession. It will be interesting to see the results of a survey between 2008 and 2010 to see how the nation's wealth and attitude to borrowing has potentially changed.
| Top Money Stories December 7th 2009 –December 11th 2009 |
